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US STOCKS-Wall St ends sharply lower, with investors on edge before CPI data Friday

reuters.com · 06/09/2022 16:00
US STOCKS-Wall St ends sharply lower, with investors on edge before CPI data Friday

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10-Year Treasury yield up

CPI data due Friday

Updates to close

By Caroline Valetkevitch

- U.S. stocks ended sharply lower on Thursday in a broad decline led by Nasdaq as investors grew cautious ahead of data on Friday that is expected to show consumer prices remained high in May.

All 11 of the S&P 500 sectors were in negative territory, with the communication services sector .SPLRCL down the most.

Adding to nervousness, the benchmark U.S. 10-year Treasury yield US10YT=RR climbed to as much as 3.073%, its highest level since May 11. nL1N2XW2AK

Recent sharp gains in oil prices LCOc1CLc1 also kept investors on edge before Friday's U.S. consumer price index report.

The data is expected to show that consumer prices rose 0.7% in May, while the core consumer price index (CPI), which excludes the volatile food and energy sectors, rose 0.5% in the month.

"We're getting prepared for what the news might be regarding inflation tomorrow," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

"I view it as mixed. If the total is high and the core number shows some sort of drop, I actually think the markets could rally on that because it'll show that things are kind of rolling over a bit."

According to preliminary data, the S&P 500 .SPX lost 98.07 points, or 2.38%, to end at 4,017.70 points, while the Nasdaq Composite .IXIC lost 332.49 points, or 2.75%, to 11,753.78. The Dow Jones Industrial Average .DJI fell 640.45 points, or 1.95%, to 32,270.45.

Investors have worried that rising inflation could keep the Federal Reserve on an aggressive path in hiking interest rates.

The U.S. central bank has raised its short-term interest rate by three-quarters of a percentage point this year and intends to keep at it with 50 basis points increases at its meeting next week and again in July. nL1N2XN28A

Alibaba Group BABA.N slid after its affiliate Ant Group said it has no plan to initiate an initial public offering. nL1N2XW1T5

(Additional reporting by Devik Jain and Mehnaz Yasmin in Bengaluru and Chuck Mikolajczak in New York; Editing by Arun Koyyur, Sriraj Kalluvila and Jonathan Oatis)